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31 Cards in this Set
- Front
- Back
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Value judgement |
The negative importance one assigns to an action or alternative |
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Opportunity cost |
The cost of a purchase or a decision measured in terms of a forgone alternative; what was given up to make a purchase or carry out a decision |
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Efficiency |
Producing a given good or service at the lowest possible cost ; getting the most output from resources |
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Equity |
Justice or fairness in the distribution of goods and services |
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Resources (factors of production ) |
Persons and things used to produce goods and services; limited in amount; categorized as labor, capital, land, and entrepreneurship. |
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Labor |
Physical and mental human effort used to produce goods and services |
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Capital |
Items such as machinery and equipment used in the production of goods and services |
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Land |
Production inputs that originated in nature such as coal and fertile soil |
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Entrepreneurship |
The function of organizing resources for production and taking the risk of success or failure in a productive enterprise |
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Wages |
Income return to labor |
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Interest |
Income return to owners of capital |
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Rent |
Income return to owners of land resources |
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Profit |
Income return to those performing the entrepreneurial function |
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Economic theory |
A formal explanation of the relationship between economic variables |
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Model |
The setting within which an economic theory is presented |
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Assumptions |
Conditions held to be true within a model |
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Econometrics |
The use of statistical techniques to describe the relationships between economic variables |
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Economic policy |
A guide for a course of action |
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Graph |
An illustration showing the relationship between two variables that are measured on the vertical and horizontal axis |
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Direct relationship |
Two variables move in the same direction; when one increases so does the other, graph as an upward sloping line |
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Inverse relationship |
Two variables in opposite directions when one increases the other decreases graphs as a downward sloping line |
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Production possibilities table |
Give the various amounts of two goods that an economy can produce with full employment and fixed resources and technology |
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Unemployment |
Resources available for production are not being used |
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Economic growth |
An increase in an economies full employment level of output over time |
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Capital goods |
Good such as machinery and equipment that are used to produce other goods and services |
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Consumer goods |
Goods such as food and household furniture that are produced for final buyers |
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Macroeconomics |
The study of the operation of the economy as a whole |
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Microeconomics |
The study of individual decision making units and markets within the economy |
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Economics |
The study of how scarce or limited resources are used to satisfy unlimited wants and needs, the study of decision making in a world of scarcity |
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Scarcity |
Too few goods and services to satisfy all wants and needs |
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Trade off |
Giving up one thing for something else |
